Mothercare Announce Astonishing Recovery and Growth

In our industry, it’s all too often we hear stories of businesses never finding their way out of financial difficulties, and eventually ceasing to exist. So when we hear a positive tale about a business (large or small) pulling their way out of financial turmoil, we’re always delighted.

This year, one such story was that of Mothercare.

Mothercare’s Cost Saving Exercises

Mothercare’s approach to financial trouble was an overhaul of the organisation, with significant changes being made to the chain across the United Kingdom. Having recognised the loss-making chain as being ‘old fashioned’, the newly appointed Mothercare head, Mark Newton-Jones, made wholesale changes in his overhaul of the business.

A year on, Mothercare have more than halved their losses in the United Kingdom to £6.1m. This has been achieved by changing their approach from being a discount-heavy retailer – less than 60% of Mothercare’s products were sold at full price. This figure has now risen to 70%, which has helped UK sales more than double in the last seven months. This approach has been supplemented by an extensive refurbishment, meant to encourage a more modern feel within its stores, including the introduction of cafes and play areas.

Mothercare’s programme of recovery, however, has not been without its casualties. 16 underperforming stores in the UK have been shut down in order to cut costs, including the brand’s considerable wage bill. It’s a sad move for the company to make, but one that reflects the business recognising its pressure points.

The Key Message

Mothercare reflect an established brand that was unafraid to recognise their weaknesses and make big changes as a result. The results of their overhaul show that the strategy has paid dividends. The lesson to be learnt is to act on financial difficulty as you become aware of it and don’t be afraid of difficult choices.

Well done, Mothercare!

A very Merry Christmas and a prosperous New Year from everyone at Parker Andrews.

If you would like to discuss administration or insolvency with the Parker Andrews team, please get in touch. You can call us on 0800 612 7593 or use our contact form.

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